Mozambique: Agreement Signed On Cabo Delgado-Gauteng Pipeline

London – The South African company SacOil Holdings on Tuesday announced that an agreement has been signed in Johannesburg which paves the way for the construction of a 2,600 kilometre gas pipeline from the Rovuma Basin in northern Mozambique to Gauteng province in South Africa.

To be known as the African Renaissance gas pipeline, it will also deliver gas to Mozambican towns along the pipeline’s route.

The agreement was signed by Mozambique’s National Hydrocarbon Company (ENH), SacOil, Profin Consulting, and the China Petroleum Pipeline Bureau (CPP). Profin is described as a Mozambican private sector consortium, while CPP, according to a SacOil release, is “a leading Chinese and international pipeline construction company that will bring a wealth of technical expertise to the pipeline project”.

According to SacOil’s chief executive officer, Thabo Kgogo, the agreement “confirms the financing commitments required for the pre-investment and engineering studies phases of the project, and paves the way for its speedy and effective construction and implementation”.

The CPP will finance and carry out the pre investment studies. It will also secure seventy per cent of the project’s budget from Chinese financial institutions. Other investment will come from Mozambique and South Africa. It is estimated that constructing the pipeline will cost six billion US dollars.

The CPP is affiliated to the China National Petroleum Company which holds a twenty per cent stake in Offshore Area Four, situated in the Rovuma Basin off the coast of Cabo Delgado province. The Italian company ENI is the operator of Area Four, which holds an estimated 85 trillion cubic feet of natural gas.

The signing of the cooperation agreement, SacOil claims, “is in line with SacOil’s strategy to become a leading Pan African oil and gas company engaged in Upstream, Midstream and Downstream activities”.

The project, SacOil says, “is being designed to make energy affordable to a greater proportion of the population, promote clean energy, reduce oil import bills, and lower carbon footprint and carbon tax”.

SacOil describes itself as “a South African based independent African oil and gas company”, listed on both the Johannesburg Stock Exchange and the Alternative Investment Market, which is a sub-market of the London Stock Exchange. Its chairperson is a former governor of the South African Reserve Bank, Tito Mboweni.

Source: All Africa